Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Gregorio v Cheadle [2018] NSWCATAP 118 Hearing dates: 08 March 2018 Date of orders: 21 May 2018 Decision date: 21 May 2018 Jurisdiction: Appeal Panel Before: M Harrowell, Principal Member F Corsaro SC, Senior Member Decision: (1) The appeal is allowed and the orders made by the Tribunal on 1 November 2017 are set aside. (2) The proceedings are remitted for rehearing by the Tribunal to be determined in accordance with these reasons and according to law. (3) Subject to order (4), the second respondent is to pay the costs of the appellants in this appeal, such costs to be as agreed or assessed under the relevant cost legislation. (4) If any party contends for a different costs order, such application (including submissions and evidence) must be filed and served within 7 days from the date of these orders. The respondent to the costs application is to file and serve submissions and evidence in reply within 14 days from the date of these orders. The applicant for costs may file and serve submissions in response 7 days thereafter. Submissions must include submissions about whether an order should be made dispensing with a hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act, 2013 (NSW). (5) In the event an application is made under order (4), order (3) shall cease to have effect. Catchwords: HOME BUILDING ACT – Statutory construction – s 18E proceedings for breach of statutory warranty – limitation period for bringing claim by a successor in title against owner builder – effect of amendment on limitation period – nature of right of successor in title under section 18C of the Home Building Act to bring proceedings for breach of statutory warranties. Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 (NSW) Home Building Act 1989 (NSW) Home Building Amendment Act 2011 (NSW) Home Building Amendment Act 2014 (NSW) Home Building Amendments (Insurance) Act 2002 (NSW) Interpretation Act 1987 (NSW) Cases Cited: Allianz v Waterbrook [2009] NSWCA 22 Anthony Horden & Sons Limited v Amalgamated Clothing and Allied Trades Union of Australia (1943) 47 CLR 1 Commissioner of Stamps (SA) v Telegraph Investment Co Pty Ltd (1995) 184 CLR 453 Construction Forestry & Mining Energy Union v Hadgkiss [2007] FCFCA 197; (2007) 169 FCR 15; 248 ALR 169 Karan v Champion Homes Sales Pty Ltd [2016] NSWCATCD 84 Kraljevich v. Lake View & Star Ltd [1945] HCA 29; (1945) 70 CLR 647 Lam v Steve Jarven Motors Pty Ltd [2016] NSWCATAP 186 Leung v Alexakis [2018] NSWCATAP 11 Maxwell v Murphy [1957] HCA 7; (1957) 96 CLR 261 Maybury v Plowman (1913) 16 CLR 468 Minister of Immigration and Indigenous Affairs v Nystrom [2006] HCA 50; [2006] 228 CLR 566 Owners Corporation SP 79417 v Trajevski [2017] NSWCATAP 101 Owners Corporation SP 82076 v Taricon Pty Ltd [2017] NSWCATCD 37 Owners Corporation Strata Plan 64757 v MJA Group Pty Ltd [2011] NSWCA 236 Owners Corporation Strata Plan 78465 v MD Constructions Pty Ltd (2016) NSWSC 162 Project Blue Sky Inc & Ors v Australian Broadcasting Authority [1998] HCA 28 Project Blue Sky Inc & Ors v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 R v Seller [2013] NSWCCA 42 The Owners Strata Plan No 66375 v Suncorp Metway Insurance Ltd (No 2) [2017] NSWSC 739 Victrawl Pty Ltd v Telstra Corporation Ltd (1995) 183 CLR 595; [1995] HCA 5 Category: Principal judgment Parties: Richard Gregorio (First Appellant) Lisa Diane Gregorio (Second Appellant) Robert Alexander Cheadle (First Respondent) Robbie Gai Cheadle (Second Respondent) Representation: Counsel: J Drummond (Appellants) G Carolan (Respondents) Solicitors: Michael Atkinson & Associates (Appellants) Maguire & McInerney (Respondents) File Number(s): AP 17/51301 Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 1 November 2017 Before: L Wilson, Senior Member File Number(s): HB 16/16101 reasons for decision Summary 1. We have concluded that, where residential building work is commenced prior to the commencement of the Home Building Amendment Act 2011 (NSW) by a person who holds an owner builder permit issued under the Home Building Act 1989 (NSW), a successor in title to that owner builder, who acquires the property on which the works were carried out, has 7 years to bring proceedings for breach of statutory warranties in respect of such work from the date determined under the Act. Introduction 1. This appeal concerns the limitation period applicable to a home building claim brought by the successors in title to an owner builder in respect of a property at Bulli (premises). 2. The building works, the subject of the dispute, were carried out pursuant to an owner builder permit obtained by the second respondent on 2 April 2008. The first and second respondents owned the premises. The work was carried out between 2008 and February 2014. 3. The appellants purchased the premises on 20 December 2014. On August 2015 a "significant weather event caused flooding" to the premises. 4. On 31 March 2016, the appellants filed home building application HB 16/16101 claiming damages against the respondents for breach of the statutory warranties under the Home Building Act 1989 (NSW) (HB Act). 5. Between when the building works were commenced, and when the proceedings were commenced in the Tribunal, legislation amended the HB Act on two occasions. The first of the amending legislation was the Home Building Amendment Act 2011 (NSW) (2011 Amending Act); the second the Home Building Amendment Act 2014 (NSW) (2014 Amending Act). 6. Before the introduction of the 2011 Amending Act, someone enforcing the statutory warranties in s 18B of the HB Act as a successor in title had 7 years from the date building works were completed to commence proceedings. The 2011 Amending Act amended that 7 year period to 6 years for a structural defect, or in any other case 2 years, commencing from the date when the work was completed. The 2014 Amending Act amendments provided that a breach of statutory warranty claim had to be commenced within 6 years from the date when work was completed, in the case of a major defect, and within 2 years in any other case. 7. On 1 November 2017 the Tribunal determined that in consequence of the 2014 Amending Act coming into force, all proceedings that had commenced after the 2014 Amending Act in respect of any building claim concerning breach of statutory warranties were subject to the limitation period of 6 years for a major defect, or in any other case 2 years from when the work was completed. The consequence of the Tribunal's finding as to the operation of the 2014 Amending Act was that any of the appellants' defective work claims that did not involve major defects were found by the Tribunal to have been out of time. The Tribunal dismissed those claims, but otherwise held the second respondent liable to pay the appellants $1500.00 as damages for those items of defective works that the Tribunal characterised as major defect claims. 8. In respect of the claim against the first respondent, who owned the premises with the second respondent, these proceedings were dismissed because the first respondent was not an owner builder, and therefore not liable under the HB Act to a successor in title. 9. The appellants appeal this decision concerning the second respondent, owner builder. Notice of Appeal and submissions 1. The appeal was commenced on 29 November 2017. The appeal was filed in time. 2. Various iterations of the Notice of Appeal have been filed, the last being a Further Amended Notice of Appeal filed on 8 February 2018. The respondents filed a Reply to Appeal dated 22 December 2017. 3. In the Notice of Appeal, the appellants seek orders that the Tribunal's original orders 2 to 6 inclusive be set aside and the proceedings be remitted to the Consumer and Commercial Division for redetermination. The grounds of appeal can be summarised as follows: 1. The Tribunal was in error in failing to conclude that the 7 year limitation period applied to the proceedings and failing to award damages in respect of all of the defects identified since the proceedings were brought in time; 2. The Tribunal was in error in deciding that only the cost of rectifying defects (whether they were structural, major or other defects), which became apparent during the period to April 2015 and 2 October 2015, could be recovered; 3. The Tribunal was in error in failing to conclude that the description of "major defect" included water penetration that was likely to cause the building or part of the building to become uninhabitable or otherwise cause its destruction or collapse; 4. The Tribunal was in error in failing to conclude there was one cause of action and that the appellants could recover subsequently discovered defects which were "merely particulars of the claim". 5. The Tribunal was in error in not following earlier decisions. 6. The reasons of the Tribunal were inadequate by reason of the matters set out above; and 7. There was a failure to afford procedural fairness to the appellants by not adjourning the proceedings due to the late service of submissions and affidavit material. 1. The Notice of Appeal does not raise an issue about when the relevant limitation period commences to run. 2. The respondents contended in the Reply to Appeal that: 1. The Tribunal properly construed the legislation, including the amending legislation and its effect concerning the limitation period; 2. There was no error in failing to follow earlier decisions of the Tribunal as the Tribunal was not bound by the principal of stare decisis; 3. The Tribunal properly distinguished an earlier decision of Owners Corporation SP 79417 v Trajevski [2017] NSWCATAP 101 and in any event was not bound by that decision; and 4. The Tribunal correctly interpreted the provisions of s 18E(e) of the HB Act concerning the entitlement to recover for alleged breach of warranty, which was apparent in the last 6 months of the warranty period. 1. The parties provided written submissions and oral submissions at the hearing. 2. Having regard to the conclusion that we have reached, it is only necessary to consider the submissions concerning whether the 2014 Amending Act operated in a manner which deprived the appellants of the benefit of the 7 year warranty period. 3. The appellants' submissions can be summarised as follows. 4. Prior to the 2011 Amending Act, s 18E provided that proceedings for breach of statutory warranties must be commenced within 7 years after the completion of the work to which the claim relates: see the then s 18E(1)(a). The 2011 Amending Act amended s 18E by omitting s 18E(1) and substituting a new s 18E(1) that provided the warranty period was 6 years for a breach that results in a structural defect or 2 years in any other case. However, that amendment did not apply in respect of a contract for residential building work entered into before the commencement of the amendment because of cl 109 of Part 19 of Sch 4 of the HB Act. That schedule contains the saving and transitional provisions relating to various pieces of legislation, which have amended the HB Act over time. 5. The appellants submitted that s 3B(3)(b) of the HB Act, introduced by the 2011 Amending Act, provided for a deeming provision for completion in respect of owner builder work. 6. In respect of the 2011 Amending Act, the appellants referred to the First and Second Reading Speeches which the appellants submitted made clear that the changes made by that Act did not affect or prejudice the rights and obligations created by contracts entered into prior to 1 February 2012. This was the effect of cl 109. In this regard the appellants relied on the statement of Hammerschlag J in Owners Corporation Strata Plan 78465 v MD Constructions Pty Ltd (2016) NSWSC 162 at [17]. 7. As an owner builder, under s 18C the second respondent is taken to have done the work under a contract with the appellants as successors in title. Because the second respondent had "entered into a number of contracts with subcontractors to construct the new home to at least 'lock-up stage', such work being completed by January 2009 ... there arose no requirement in the present case to infer entry by the owner builder into contracts to perform residential building works": written submissions at [29]. Further, any "deemed contract" in respect of rendering work done by the second respondent was entered into on or before 1 February 2012. As the contracts came into existence prior to the commencement of the 2011 Amending Act, the 7 year limitation period applied to all defects. 8. The 2014 Amending Act had the effect of amending s 18E(1) (as it was after the 2011 Amending Act) to change the reference to a breach of a "structural defect" for which the six-year period applied to a breach of a "major defect" to which a 6 year period applied. The appellants submitted that cl 121 of Part 20 of Sch 4 (which relates to the transitional provisions consequent on the 2014 Amending Act) has the effect that the changes to s 18E(1) from "structural defect" to "major defect" applies to residential building work commenced or completed before the commencement of the 2014 Amending Act, and to a contract to do residential building work entered into before the commencement of the 2014 Amending Act (including a contract completed before the commencement) except where proceedings had been commenced or a claim had been made under a relevant contract of insurance. In other words, the appellants submit that the amendments introduced by the 2014 Amending Act are retrospective, and only proceedings that were already commenced, or insurance claims that were already made, were unaffected by the truncation of the 7 year period that had formerly applied. 9. However, the appellants further submit that, upon the proper construction of the HB Act and the 2014 Amending Act, no changes were made to s 18E(1) as it was prior to the 2011 Amending Act, that cl 109 has not been repealed and that the 7 year period continues to apply in respect of a contract for residential building work entered into before the commencement of the 2011 Amending Act. Rather, "the sole purpose of Sch 1 cl [28] of the Home Building Amendment Act 2014 was to delete from section 18E(1)(b) the term "structural defect" and to insert the term "major defect", with Sch 1 cl [29] of the 2014 Amending Act providing relevant definitions for a "major defect"." 10. The appellants referred to cl 109 and noted that cl 120 of Part 20 was in identical terms to cl 105 of Part 19. Having compared the provisions of cls 106 and 107 of Part 19 with cl 121 of Part 20, the appellants submitted that the later provisions "reflect the same legislative purpose" found in the earlier provisions and that there is no provision in the 2014 Amending Act, including Part 20, which seeks to "repeal amend or otherwise restrict the operation of clause 109, including the preservation of the seven-year limitation for all defects for contracts entered into prior to 1 February 2012": appellants' submissions at [45]. 11. Having referred to the decision of the Tribunal in Karan v Champion Homes Sales Pty Ltd [2016] NSWCATCD 84 (Karan), the appellants made submissions concerning various principles of statutory construction. These submissions were: 1. Where an Act is frequently or extensively amended, there arises an increased risk that the later provisions may unintentionally appear inconsistent with former provisions: Construction Forestry & Mining Energy Union v Hadgkiss [2007] FCAFC 197; (2007) 169 FCR 15; 248 ALR 169 at [15]. 2. Where a specific provision such as cl 109 is included in an amendment to achieve a specific purpose, provisions which follow in later amendments, and which are capable of general application, are excluded to the extent of any inconsistency: Anthony Horden & Sons Limited v Amalgamated Clothing and Allied Trades Union of Australia (1943) 47 CLR 1 at 7. 3. The general power is to be read subject to a restriction in the former specific power: Minister of Immigration and Indigenous Affairs v Nystrom [2006] HCA 50; [2006] 228 CLR 566 at [50] and [59]. 4. A later general provision is deemed not to repeal or cut down the earlier specific provision, but must yield to the specific provision: Maybury v Plowman (1913) 16 CLR 468 (Maybury) at 473-4. 1. The appellants also referred to the decision of the Appeal Panel in Lam v Steve Jarven Motors Pty Ltd [2016] NSWCATAP 186 at [46]-[47] and the principles applicable to the resolution of potentially contradictory statutory texts. Included in this reference was the decision of the High Court in Project Blue Sky Inc & Ors v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 (Project Blue Sky). 2. The appellants then continued and said that cls 109 and 121(1)(a) are reconcilable in that the amendments made by the 2014 Amending Act apply retrospectively, but only to those contracts to which the 2011 Amending Act applied. Otherwise, those contracts entered into prior to the 2011 Amending Act continue to be regulated by the HB Act as it was prior to the 2011 Amending Act. That is, cl 109 continues to operate with the effect that the 7 year limitation period applies to contracts entered into prior to the commencement of the 2011 Amending Act. 3. Alternatively, the appellants say that if cl 121(1)(a) is irreconcilable with cl 109 then the general provision in cl 121(1)(a) must yield to the specific provision contained in cl 109. 4. Lastly, the appellants challenge the reasoning of the Tribunal in reaching its conclusion, particularly in rejecting Karan. 5. In reply, the respondents referred to the text of cl 121 and submitted that it was to apply "to all work commenced and completed before the commencement of the 2014 Amending Act. The respondents argued before us that this proposition was supported by reference to the second reading speech in respect of the 2014 Amending Act where the Minister for Fair Trading, Mr Ayres, said: It is necessary to reduce the significant time and money spent by parties on disputes and to ensure more consistent Court and Tribunal decisions. This will deliver costs savings for home owners, builders and the Home Warranty Insurance Fund. 1. While the respondents accepted that provisions inserted by the amending Act are to be construed together with the unamended provisions, reference being made to Commissioner of Stamps (SA) v Telegraph Investment Co Pty Ltd (1995) 184 CLR 453 at 463, the respondents relied on a statement of Bathurst CJ in R v Seller [2013] NSWCCA 42 at [100] where the Chief Justice said: Where a statute is amended both the Act which is amended and the amending Act must be read together as a combined statement of the will of the legislature as a consequence of which the effect of the amending Act may be to alter the meaning which the remaining provisions of the amended act or before the making of the amendments. 1. The respondents then said that "it is not clear that the legislature intended to preserve the 7-year regime for contracts entered into prior to 1 February 2012, given the stated intention to reduce the scope of dispute and the cost of litigation". Consequently, the respondents said that the appellants' submission regarding the general power being read subject to a restriction in a former specific power should be treated with caution because "there are clear words giving primacy to the amendments brought in Part 20". Consideration 1. This appeal turns on the proper construction and operation of the HB Act. 2. We pause at this point to note that the appeal concerns the liability of the second respondent, Mrs Cheadle, who was the holder of an owner builder permit. However, in the original proceedings the second respondent's husband, Mr Cheadle, was also a respondent although the claims against him were dismissed as he was not the holder of an owner builder permit. There is no appeal from the order dismissing the claim against the first respondent. Nothing turns on these facts for the purpose of this appeal or the submissions which have been made other than that the first respondent is also a party to this appeal by reason of r 29(b) of the Civil and Administrative Tribunal Rules 2014 (NSW) (Rules). Consequently, as no party has applied to remove the first respondent he remains a party to this appeal. In this regard we note that the first respondent was represented by the same lawyers as his wife at the proceedings at first instance, being the lawyers who have also represented the second respondent in this appeal. We also note that the first respondent has not sought to make any submissions in connection with the appeal. 3. The issue on which this appeal ultimately turns is whether the 2014 Amending Act amendments operate retrospectively so as to alter the limitation period for commencing building claims for breach of the statutory warranties prescribed by section 18B of the HB Act arising in connection with building contracts entered into prior to 1 February 2012, being the date when the 2011 Amending Act came into force. 4. The respondents' position is that the effect of the transitional provisions, including cls 120 and 121 of Part 20 of Sch 4 is to make the operation of the amendment of s 18E(1) by the 2014 Amending Act retrospective to proceedings brought after the date of its commencement for breach of statutory warranties, including proceedings in relation to work commenced or contracts entered into prior to the commencement of the 2011 Amending Act. That is, the 7 year limitation for any breach has been reduced to 6 years for major defects and 2 years otherwise. 5. Clause 120 and 121 provide: 120 Application of Part (1) This Part prevails to the extent of any inconsistency with any other provision of this Schedule. (2) Regulations made under clause 2 of this Schedule have effect despite any provision of this Part. 121 General operation of amendments (1) Except as otherwise provided by this Part or the regulations, an amendment made by the amending Act extends to: (a) residential building work or specialist work commenced or completed before the commencement of the amendment, and (b) a contract to do residential building work or specialist work entered into before the commencement of the amendment (including a contract completed before that commencement), and (c) a contract of insurance entered into before the commencement of the amendment, and (d) a loss, liability, claim or dispute that arose before the commencement of the amendment, and (e) an application for a licence or certificate that is pending on the commencement of the amendment. (2) However, an amendment made by the amending Act does not apply to or in respect of: (a) proceedings commenced in a court or tribunal before the commencement of the amendment (whether or not the proceedings were finally determined before that commencement), or (b) a claim made before the commencement of the amendment under a contract of insurance (whether or not the claim was finalised before that commencement). 1. The respondents submitted that the language in cl 121 is clear, and that the legislature has expressed an intention in this provision that the amendment operates retrospectively in respect of all contracts. The respondents say that the Tribunal, in earlier decisions such as Owners Corporation SP 82076 v Taricon Pty Ltd [2017] NSWCATCD 37 failed to consider the interaction of Parts 19 and 20 of Sch 4. Further, the intention of Parliament can be discerned from the second reading speech of the Minister. 2. The position adopted by the respondent is supported by a consideration of the provisions relating to the other amendments to Part 2C – Statutory Warranties of the HB Act affected by the 2014 Amending Act 3. In addition to the amendment of s 18E, the 2014 Amending Act also made amendments to s 18B – the statutory warranties and to whom those warranties apply, s 18BA – Duties or persons having benefit of statutory warranty and s 18F – Defences. 4. For present purposes, it is unnecessary to set out the amendments to ss 18BA and 18F. However, it is necessary to note cl 125 of Part 20 of Sch 4 which provides: 125 Statutory warranties (1) Section 18BA (Duties of person having benefit of statutory warranty) does not apply in respect of a contract entered into before the commencement of the section. (2) The amendment of section 18F by the amending Act does not apply in respect of a contract entered into before the commencement of the amendment. 1. Similarly, in respect of amendment of the provisions relating to contracts (s 7, excluding s 7(8) and 7A) and ss 8, 8A and 16E (relating to deposits and progress payments), we note these provisions also do not operate in respect of contracts entered into before the commencement of the 2014 Amending Act: see cls 123 and 124 of Part 20. 2. The amendments to s 18B were in Sch 1. Clauses [25]-[26] provided: [25] Section 18B Warranties as to residential building work Omit "performed in a proper and workmanlike manner" from section 18B (a). Insert instead "done with due care and skill". [26] Section 18B (2) Insert at the end of section 18B: (2) The statutory warranties implied by this section are not limited to a contract to do residential building work for an owner of land and are also implied in a contract under which a person (the principal contractor) who has contracted to do residential building work contracts with another person (a subcontractor to the principal contractor) for the subcontractor to do the work (or any part of the work) for the principal contractor. 1. However, unlike the amendments to ss 18BA and 18F, the savings and transitional provisions contained no express limitation excluding from the operation of the amendment to s 18B "residential building work or specialist work commenced or completed before the commencement of the amendment" or "a contract to do residential building work or specialist work entered into before the commencement of the amendment (including a contract completed before that commencement)". At a first reading, cl 121(1) of the savings and transitional provisions would appear to operate and to exclude only proceedings commenced prior to the commencement of the 2014 Amending Act: see cl 121(2). 2. In their submission on appeal, the respondents accepted that s 18E in its amended form (following the 2011 Amending Act) did not apply to proceedings brought after commencement of the 2011 Amending Act in respect of claims for breach of statutory warranty arising from contracts entered into prior to 1 February 2012. Rather, s 18E as it existed before the 2011 Amending Act was applicable so that a 7 year limitation period applied to all claims for breach of statutory warranty of contracts entered into prior to 1 February 2012. 3. In this regard, prior to the 2011 Amendment, s 18E (18E – 7 year limitation provision) provided as follows: 18E Proceedings for breach of warranties (1) Proceedings for a breach of a statutory warranty must be commenced within 7 years after: (a) the completion of the work to which it relates, or (b) if the work is not completed: (i) the date for completion of the work specified or determined in accordance with the contract, or (ii) if there is no such date, the date of the contract. (2) The fact that a person entitled to the benefit of a statutory warranty specified in paragraph (a), (b), (c), (e) or (f) of section 18B has enforced the warranty in relation to a particular deficiency in the work does not prevent the person from enforcing the same warranty for a deficiency of a different kind in the work (the other deficiency) if: (a) the other deficiency was in existence when the work to which the warranty relates was completed, and (b) the person did not know, and could not reasonably be expected to have known, of the existence of the other deficiency when the warranty was previously enforced, and (c) the proceedings to enforce the warranty in relation to the other deficiency are brought within the period referred to in subsection (1). 1. Schedule 1 [13] of the 2011 Amending Act amended s 18E (18E – structural defect limitation provision) provided: Section 18E Proceedings for breach of warranties Omit section 18E (1). Insert instead: (1) Proceedings for a breach of a statutory warranty must be commenced in accordance with the following provisions: (a) proceedings must be commenced before the end of the warranty period for the breach, (b) the warranty period is 6 years for a breach that results in a structural defect (as defined in the regulations) or 2 years in any other case, (c) the warranty period starts on completion of the work to which it relates (but this does not prevent proceedings from being commenced before completion of the work), (d) if the work is not completed, the warranty period starts on: (i) the date the contract is terminated, or (ii) if the contract is not terminated—the date on which work under the contract ceased, or (iii) if the contract is not terminated and work under the contract was not commenced—the date of the contract, (e) if the breach of warranty becomes apparent within the last 6 months of the warranty period, proceedings may be commenced within a further 6 months after the end of the warranty period, (f) a breach of warranty becomes apparent when any person entitled to the benefit of the warranty first becomes aware (or ought reasonably to have become aware) of the breach. 1. The respondents were correct to concede that the s 18E – structural defect limitation provision did not apply to contracts entered into before the commencement of the 2011 Amending Act. This is apparent from a consideration of cl 106 and 109 of Part 19, which applied to the 2011 Amending Act. 2. First, it is clear from cl 106 that the amendments provided by the 2011 Amending Act were "for the purpose of avoidance of doubt" not to generally change the law as applied to work done or contracts entered into prior to that time: see eg s 3B which relates to the date of completion of residential building works. Clause 106 provides: 106 Purpose and operation of amendments The amendments made by the amending Act are made for the purpose of the avoidance of doubt and accordingly (except as otherwise provided by this Part) those amendments extend to: (a) residential building work commenced or completed before the commencement of the amendment, and (b) a contract of insurance entered into before the commencement of the amendment, and (c) a loss or liability that arose before the commencement of the amendment, and (d) the notification of a loss before the commencement of the amendment. 1. Second, cl 109 expressly excluded retrospective operation of the amendment to s 18E. That clause provides: 109 Proceedings for breach of statutory warranties The amendment made to section 18E by the amending Act does not apply in respect of a contract for residential building work entered into before the commencement of the amendment. 1. However, the question remains whether the various amendments to s 18E and the effect of cl 121 is to alter the liability of an owner builder for work done or commenced to be done prior to the 2011 Amending Act and/or alters the limitation period for which proceedings may be commenced from 7 years for all defects to 6 years for major defects and 2 years in any other case. 2. That involves a consideration of three matters: 1. Is work done by an owner builder work "in respect of a contract for residential building work entered into before the commencement of the amendment" within the meaning of cl 109? 2. If yes, upon its proper construction, did the general provisions in cl 121 operate to repeal cl 109? Put another way, was cl 121 inconsistent with cl 109 and therefore prevailed over cl 109 by reason of cl 120(1) Sch 4 Part 20? 3. Is the position affected by reason of the fact that the rain event, the cause of damage to the property, occurred in about August 2015, after the 2014 Amending Act had commenced? 1. The following principles are relevant to the resolution of these issues. 2. First, unless there is a reasonably clear intention to the contrary, an amendment to an Act should not be construed in a manner that imposes or otherwise affects the rights or liabilities which the law previously provided in respect of past events. The principles in Maxwell v Murphy [1957] HCA 7; (1957) 96 CLR 261 (Maxwell), as relevantly reflected in the Interpretation Act, 1987 (NSW) (Interpretation Act) are applicable. In Maxwell, Dixon CJ said at [7]: 7. The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events. But, given rights and liabilities fixed by reference to past facts, matters or events, the law appointing or regulating the manner in which they are to be enforced or their enjoyment is to be secured by judicial remedy is not within the application of such a presumption. Changes made in practice and procedure are applied to proceedings to enforce rights and liabilities, or for that matter to vindicate an immunity or privilege, notwithstanding that before the change in the law was made the accrual or establishment of the rights, liabilities, immunity or privilege was complete and rested on events or transactions that were otherwise past and closed. The basis of the distinction was stated by Mellish L.J. in Republic of Costa Rica v. Erlanger (1876) 3 Ch D 62 "No suitor has any vested interest in the course of procedure, nor any right to complain, if during the litigation the procedure is changed, provided, of course, that no injustice is done" (1876) 3 Ch D, at p 69 (at p267). 1. This must be considered with what His Honour went on to state at [12] 12. To say that notionally the right to damages continued to exist and only the manner of enforcing the right had been destroyed appears to me to ignore the fact that the right to damages could not be separated from the right to recover them. There are rights in English law which have an existence and a purpose although the remedy be suspended or wanting. But the right here in question is not one of them. If the amending statute received the operation for which the appellant contends, it would impose a new a liability that had ceased to exist. The presumptive interpretation is against such an operation. (at p269). 1. Secondly, s 30 of the Interpretation Act provides: 30 Effect of amendment or repeal of Acts and statutory rules (1) The amendment or repeal of an Act or statutory rule does not: (a) revive anything not in force or existing at the time at which the amendment or repeal takes effect, or (b) affect the previous operation of the Act or statutory rule or anything duly suffered, done or commenced under the Act or statutory rule, or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under the Act or statutory rule, or (d) affect any penalty incurred in respect of any offence arising under the Act or statutory rule, or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability or penalty, and any such penalty may be imposed and enforced, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, as if the Act or statutory rule had not been amended or repealed. (2) Without limiting the effect of subsection (1), the amendment or repeal of an Act or statutory rule does not affect: (a) the proof of any past act or thing, or (b) any right, privilege, obligation or liability saved by the operation of the Act or statutory rule, or (c) any amendment or validation made by the Act or statutory rule, or (d) the operation of any savings or transitional provision contained in the Act or statutory rule. 1. It is relevant to observe the following in respect of these provisions: 1. No right, liability or obligation that is acquired, accrued or incurred is affected by the amendment and any "legal proceeding or remedy may be instituted, continued or in force as if the Act … had not been amended or repealed" (emphasis added): s 30(1)(b); and 2. The amendment or repeal of an Act does not affect the operation of any savings or transitional provisions contained in the Act: s 30(2)(d). 1. The third matter of relevance is that the construction of a statute requires the court or tribunal to determine a meaning consistent with all provisions in the Act. The statement of the High Court in Project Blue Sky concerning statutory construction is relevant. At [69]-[71] the Court said (citations omitted): Conflicting statutory provisions should be reconciled so far as is possible 69 The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed. 70 A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme. 71 Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In The Commonwealth v Baume Griffith CJ cited R v Berchet to support the proposition that it was "a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent". 1. Fourthly, where the legislature has provided for a particular matter, a subsequent amendment, in general terms wide enough to repeal or qualify the original provision, should not be taken as doing so unless a clear intention is expressed. In Maybury, the High Court said at 473-4: The judgment under appeal turns upon the application of the principle involved in the maxim" generalia specialibus non derogant" to cases in which the legislature, after having dealt specially with a particular matter, has afterwards passed an enactment in general terms wide enough to repeal, or supersede, or qualify the original provision. In the case of In re Smith's Estate; Clements v. Ward (1) Stirling J. stated the rule in terms which the learned Chief Justice has quoted in the Supreme Court, and which I need not repeat. But I wish to quote a passage from the judgment of Wood V.C. in Fitzgerald v. Champneys (2), quoted by Stirling J. in the case cited (3), as follows:-" The reason in all these cases is clear. In 'passing the special Act, the legislature had their attention directed to the special case which the Act was meant to meet, and considered and provided for all the circumstance of that special case; and, having so done, they are not to be considered by a general enactment passed subsequently, and making no mention of any such intention, to have intended to derogate from that which, by their own special Act, they had thus carefully supervised and regulated." 1. In the present case, Sch 1 cls [28] and [29], the 2014 Amending Act provided for the amendment of s 18E (s 18E – Major defect limitation provision) as follows: [28] Section 18E Proceedings for breach of warranties Omit "structural defect (as defined in the regulations)" from section 18E (1) (b). Insert instead "major defect in residential building work". [29] Section 18E (3) and (4) Insert after section 18E (2): (3) The regulations may prescribe defects in a building that are not (despite any other provision of this section) a major defect. (4) In this section: major defect means: (a) a defect in a major element of a building that is attributable to defective design, defective or faulty workmanship, defective materials, or a failure to comply with the structural performance requirements of the causes, or is likely to cause: (i) the inability to inhabit or use the building (or part of the building) for its intended purpose, or (ii) the destruction of the building or any part of the building, or (iii) a threat of collapse of the building or any part of the building, or (b) a defect of a kind that is prescribed by the regulations as a major defect. Note. The definition of major defect also applies for the purposes of section 103B (Period of cover). major element of a building means: (a) an internal or external load-bearing component of a building that is essential to the stability of the building, or any part of it (including but not limited to foundations and footings, floors, walls, roofs, columns and beams), or (b) a fire safety system, or (c) waterproofing, or (d) any other element that is prescribed by the regulations as a major element of a building. Is work done by an owner builder work "in respect of a contract for residential building work entered into before the commencement of the amendment" within the meaning of cl 109? 1. Part 2C Statutory Warranties of the HB Act "applies to residential building work only to the extent that it is done or to be done under a contract" made on or after the commencement of that Part: see s 18A. 2. The liability imposed upon an owner builder in respect of work done under an owner builder permit arises under s 18C of the HB Act. Relevantly, that section provides: 18C Warranties as to work by others (1) A person who is the immediate successor in title to an owner-builder, a holder of a contractor licence, a former holder or a developer who has done residential building work on land is entitled to the benefit of the statutory warranties as if the owner-builder, holder, former holder or developer were required to hold a contractor licence and had done the work under a contract with that successor in title to do the work. 1. The liability under s 18B – Warranties as to residential building work arises because those warranties "are implied in every contract to do residential building work". As such, liability is only imposed into a relevant contract. 2. Under s 18C, the work is taken to have been done "under a contract … to do the work" between the owner builder and the successor in title. That provision has remained the same throughout the period with which we are concerned. 3. In The Owners Strata Plan No 66375 v Suncorp Metway Insurance Ltd (No 2) [2017] NSWSC 739 at [60], in the context of a claim by a successor in title, Ball J said there was a "notional contract" into which the statutory warranties under s 18B were implied. Alternatively, it might be described as a contract implied by statute. In this regard, in Allianz v Waterbrook [2009] NSWCA 224 (Allianz), both the majority of the Court of Appeal (Ipp JA with whom Hodgson JA agreed) and Giles JA (in dissent) describe the nature of the right created by s 18D in the following terms. 4. When dealing with a submission concerning what was the proper measure of damages in respect of a claim for breach of statutory warranties by successor in title, Giles JA said at [17]-[18]: 17 Allianz relied on Bryan v Maloney (1995) 182 CLR 609 for departure from the cost of rectifying the defect. It submitted that a successor in title, as in that case suffered economic loss when a latent defect became patent, and that there was no economic loss when the defect was patent at the time of acquisition. The reliance is misplaced: it overlooks the statutory contractual basis for the successor in title's rights. 18 Acquisition of the dwelling is an additional event, but it is not one which changes the statutory contractual basis of recovery for breach of warranty. On the contrary, it is precisely what the Act adopts in conferring on a successor in title the rights of the predecessor in title in respect of the statutory warranty. Acquisition of the dwelling is a qualifying factor, not a disqualifying factor, and the legislature has not differentiated between acquisition where a defect is reasonably visible and acquisition where it is not. 1. While less direct, it is implicit that the majority in Allianz also concluded that the rights of the successor in title in respect of any breach of the statutory warranties arose in consequence of a contractual arrangement created by the operation of s 18D of the HB Act. Relevantly, Ipp JA said at [65], [69] and [74]: 65 Section 18D conferred on a successor in title to a person entitled to the benefit of statutory warranties only the rights that that person had "in respect of" the statutory warranties. That is, it enabled the successor in title to claim whatever remedies might be available to it based on a breach of the statutory warranties by the builder. Those remedies included recovery of any loss incurred by the successor arising from the breach of the statutory warranties (and, arguably, the right to enforce the statutory warranties). It is not suggested that s 18D conferred the right on a successor to claim the losses its predecessor incurred arising out of a breach of the statutory warranties. That does not appear to be the intent of the legislation. Thus, s 18D did not have the same effect as an equitable assignment of a chose in action. … 69 Belgrove v Eldridge was a case in contract and Bryan v Maloney a case in tort. The present, to the extent that it involves claims under the Policy is a claim in contract, but it is overlaid by the statutory application of the statutory warranties. Notwithstanding the influence of the statutory rights and duties in this case, I accept Mr Liney's argument that the contractual measure of damages (Belgrove v Eldridge) applies, as McDougall J held. … 74 Plainly, the legislation conferred the benefit of the statutory warranties on successors in title to the person for whom the building work was done, and required the statutory policy to respond to any loss caused by the breach of the statutory warranties. But these matters do not assist in determining the basic question, namely, whether "loss" is to be construed as the loss actually suffered by the successors in title and is to be subject to general law principles of causation, or whether "loss" is to be construed as meaning merely the cost of remedying work that, in breach of the statutory warranties, was defective. 1. Notably, in a case involving a claim brought under s 18D by the successor in title against a developer who had rights against it's builder under a contract, the majority in Allianz said that the rights granted to a successor in title under s 18D of the HB Act did not affect an assignment of the original contract by which those rights arose: at [65]. Rather, the statutory regime created the right to claim for breach of the statutory warranties, the entitlement to loss and damage being assessed having regard to general law principles applicable to claims in contract. This assessment required (if appropriate) a consideration of whether or not the chain of causation might be broken where patent defects existed at the time the successor in title purchased the property, thereby preventing a successor in title from claiming the cost of rectification: per Ipp JA at [90], [100]-[116]. In this regard the Court was considering whether the right to contractual damages could be denied by reason of a novus actus interveniens. 2. It should also be noted that the analysis of Ipp JA, in part, involved a consideration of amendments to the insurance provisions of the HB Act that were made by the Home Building Amendments (Insurance) Act 2002 (NSW). Relevantly, those amendments changed the indemnity required from that covering "loss" to an indemnity in respect of "compensation from the contractor for a breach of a statutory warranty in respect of the work"; or "to have the contractor rectify any such breach". While Hodgson JA did not adopt this part of the reasoning of Ipp JA (Hodgson JA gaining no assistance in answering the questions in the Allianz appeal by a consideration of the later legislation: at [31]) this alteration in respect of the form of insurance required is a matter relevant to the proper construction of the HB Act and is indicative of the nature and extent of the liability in the present appeal. 3. In the subsequent case of Owners Corporation Strata Plan 64757 v MJA Group Pty Ltd [2011] NSWCA 236 (MJA Group), Young JA (with whom Allsop P and MacFarlan JA agreed) also considered the nature of the claim and the rights created in favour of a successor in title under s 18C. At [34]-[37] his Honour said: 34 The primary judge said that s 18C involved the finding of a contract between the developer and the builder and then creating a notional contract of the same terms between the developer and the Owners' Corporation. She then held that the work under the contract with Build-Care was completed on 5 January 2001 so that the limitation period expired before the appellant issued its claim and so the action was statute barred. 35 The appellant says that her Honour wrongly construed s 18C so that there was a separate right of action in respect of each contract: (a) a right of action against the respondent for defects in the Build-Care work; and (b) a separate right of action for defects in work undertaken by the other builder. The true construction of s18C is that there is a single right of action in respect of the totality of the residential building work done. On this basis, the work was not completed until the southern wall had been finished some time in March 2001 and the action was within time. 36 In my view, her Honour was correct in her ruling on this question. Additionally to her own reasons, it seems to me that the whole structure of the Home Building Act ss 18B to 18E is that the developer is in a notional contractual relationship with the Owners' Corporation and the contract made by the developer with the builder is what is being looked at as to the content of that notional contract. 37 Further, though this is not as strong an indicator, it seems to me on parity of reasoning with Stucoid Pty Ltd v Stadiums Pty Ltd [1960] HCA 41; 107 CLR 521, that one reads "the work" as referring to the work the subject of the claim for defects. If this were not so great difficulties would be caused where a project manager had a building erected by multiple sub-contractors and one can hardly fix the legislature with the intention to cause such difficulties. 1. MacFarlan JA (with whom Allsop P agreed) added to these comments at [3]-[4]: 3 The appellant argued that "s 18C [ Home Building Act 1989] created a single right of action in respect of the totality of the residential building work done by the Respondent by its several contractors" (Written Submissions [1.7]). It submitted that the consequence of this was that the period within which the appellant, as the new owner of the property, could bring proceedings under s 18C against the respondent, as developer, commenced to run on the date of completion of the last of the building work undertaken for the respondent, even though that last completed work was done pursuant to a contract with a builder other than Build-Care Pty Ltd. If this submission is correct, the appellant commenced these proceedings within the seven year limitation period. 4 I do not however accept the submission. There is in my view nothing in the language of s 18C, or any other part of the Home Building Act , that prevents s 18C being construed distributively, so that a subsequent owner acquires a number of causes of action against the developer corresponding with causes of action that the developer has against different building contractors. Such a construction gives the section a sensible operation and is consistent with its language. 1. That is, the Court concluded the period for bringing proceedings for breach of statutory warranties against a developer by a successor in title in respect of the notional contract commences to run on the date the work was completed by the contractor who did the work on behalf of a developer. This is because the s 18C of the HB Act attaches the statutory warranties under the notional contract to the work actually done. In the case of an owner builder, the owner builder permit authorises the owner builder to do the work and it is that work to which the notional contract attaches. 2. As explained in Leung v Alexakis [2018] NSWCATAP 11 at [81] and following, the scope of work in the notional contract is the work undertaken in accordance with the owner builder permit, whether or not that work is contracted by the owner builder to third parties. 3. Section 18E in any of its forms is clearly intended to regulate the time for bringing a claim for breach of statutory warranty. However, the time period has been altered from 7 years (as existed prior to the 2011 Amending Act), to 6 years for a "structural defects" and otherwise 2 years (as existed prior to the 2014 Amending Act), and thereafter to 6 years for "major defects" and otherwise 2 years. In this regard, s 18E, in any of its forms, refers to when "proceedings for breach of a statutory warranty must be commenced". There is no distinction between a claim brought by a homeowner against a contractor under a contract and those brought by a successor in title/homeowner against an owner builder under ss 18C or 18D. 4. As stated in cl 109, s 18E as it existed prior to the 2011 Amending Act was intended to continue to apply to "a contract for residential building work entered into before the commencement of the amendment". 5. The expression "contract" is not defined in the HB Act. Section 18E uses the expression "contract" in the context of determining when the work is completed. That expression is also used in ss 18A, 18B and 18C. There is no reason why the word "contract" in cl 109 should be given a meaning different to its meaning in Part 2C. That meaning is a contract for residential building work into which the statutory warranties are implied. 6. In our view, such a "contract" would include a "contract" to which s 18C is referring, whether called a "notional contract" or a contract implied by statute. Our reasons are as follows. 7. A construction of Part 2C that would exclude any "notional" contract from the expression "contract" would lead to the result that s 18E in any of its forms would not operate to impose a limitation period in respect of claims for breach of statutory warranty against an owner builder (whether or not the limitation period operated in respect of "structural defects", "major defects" or otherwise). This is because: 1. the liability imposed in respect of the statutory warranty provisions in Part 2C only applies to work "done or to be done under a contract made on or after the commencement of this section": see s 18A; and 2. the time from which the limitation period commences to run is fixed by reference to completion of the works or the date specified in the contract or, if no date is specified, the date of the contract: see 18E(1)(a) and (b) for s 18E – 7 year limitation provision, and s 18(1)(c) and (d) for s 18E – Structural defect limitation provision and s 18E – Major defect limitation provision. 1. This position is not, relevantly, affected by the introduction of s 3B in the 2011 Amending Act or its amendment by the 2014 Amending Act; that section also fixing the date for completion by reference to the contract or the date on which work was last carried out. In this regard we note neither party has asked to determine the date on which the limitation period commenced or the effect of s 3B, but only whether the 7 year limitation period applies. 2. When seen in this light, the expression "contract" used in cl 109 should be given the same meaning so that cl 109 operated to preserve the 7 year limitation period in respect of claims for breach of statutory warranty brought against an owner builder by a successor in title in respect of a "notional contract" arising from work carried out by the owner builder under an owner builder permit. 3. Further, a construction to the effect that the only rights preserved in cl 109 are those arising between privies to an actual contract and not those who are successors in title to that privy or who otherwise acquire rights under ss 18C and 18D (because the builder was an owner builder or was a person who did not do the work under a contract) would lead to an untenable result. 4. This is demonstrated by the following. 5. As was made clear in Allianz and MJA Group, a successor in title to a vendor/owner who contracted with the builder has rights against the builder determined by the "notional contract" on terms of the original contract. The HB Act does not effect an assignment of the original contract. However, these rights are fixed by reference to the contract (or contracts) between the vendors/owner and the builder (or builders), including when the limitation period commences to run. In such a case, s 18D says the successor in title "has the same rights" as the vendor/owner. A construction of cl 109 that had the effect of excluding these successors in title, who have a notional contract and whose rights are derived from the original contract, from the benefit of the 7 year period by reason of the 2011 Amending Act would lead to the consequence that they did not have "the same rights" with respect to breach of the statutory warranties against the builder. That is, such a construction of cl 109 would be inconsistent with the language of s 18D of the HB Act. 6. Having reached this conclusion, there is no reason to infer that the legislature intended to treat in a different manner those who acquired rights under a "notional contract" with an owner builder or those whose rights arise otherwise than in connection with an actual contract. 7. There is yet a further and complicating matter to consider in this case. In circumstances where a successor in title does not acquire the property on which the residential building work has been conducted until after the 2011 Amending Act came into force, is there a relevant "contract … entered into before the commencement of the amendment" within the meaning of cl 109. 8. In the case of an owner builder/successor in title claim for breach of statutory warranties, there is in fact no original contract for the carrying out of building work by the owner builder. While there may be an inchoate liability of an owner builder to a successor in title, such liability cannot arise until the property, on which the residential building work was done, is sold to the successor in title. 9. As the (now repealed) insurance provisions made clear, the obligations on an owner builder under the HB Act did not require insurance for the work when it was done. Rather, s 95 of the HB Act prevented the owner builder from entering into a contract for sale of the land on which the residential building work was done unless, at that time, "a contract of insurance that complies with (the HB Act) is in force in relation to the work or proposed work". 10. In the present case, the appellants acquired the property on 20 December 2014. Arguably, this is likely the point when the "notional contract" arises. On that scenario, by the time of the "notional contract", the 2011 Amending Act was already in force, s 18E had been amended, and any rights which had been acquired by the appellant as successor in title were those to which the limitation periods in s 18E as amended by the 2011 Amending Act applied. An alternative argument is that, analogous to the position of a successor in title to a vendor/homeowner who was a privy in a contract with the builder, the notional contract is formed at the point in time when the work was done. 11. In our view the answer to this question is again found in the analysis of the text of s 18C. 12. Section 18C entitles the immediate successor in title to an owner builder to the benefit of the statutory warranties "as if the owner builder … had done the work under a contract with that successor in title to do the work". The use of the past tense indicates that the notional contract is to be considered as having been entered into at the point in time the owner builder "had done the work", not at the point in time when the successor in title actually acquires title to the land. 13. A contrary interpretation would lead to the anomalous result that a person who acquired property as successor in title prior to the commencement of the 2011 Amending Act would be placed in a different position to a person who acquired the same property after the commencement of the Act, notwithstanding the entitlement of both would arise under a "notional contract" at the time work was done. Similarly, if an owner builder sold to a successor in title (original successor in title) prior to commencement of the 2011 Amending Act and the original successor in title subsequently sold that property to another person (the second successor in title) after the 2011 Amending Act commenced, the second successor in title's rights would be different to those of the first successor in title due to the different limitation period applicable to particular types of claims. Such an interpretation would be contrary to s 18D(1) which provides that a person "who is a successor in title to a person entitled to the benefit of a statutory warranty under this Act is entitled to the same rights (emphasis added) as the person's predecessor in title in respect of the statutory warranty". 14. The right to bring a claim arising from the breach of a statutory warranty where there is a limitation is defined by both the nature of the claim and the time within which it might be brought. There is no indication in the legislation that the amendment to s 18E made by the 2011 Amending Act was to have the consequence of providing different rights to each successor in title for work done by an owner builder, depending on when each successor in title acquired the property on which the works were carried out. 15. It follows that the fact the appellants acquired the property after the 2011 Amending Act commenced does not preclude them from bringing proceedings for breach of statutory warranty within the 7 year period. Upon its proper construction, did the general provisions in cl 121 operate to repeal cl 109? Put another way, was cl 121 inconsistent with cl 109 and therefore cl 121 prevailed over cl 109 by reason of cl 120(1) Sch 4 Part 20? 1. The next question is whether cl 121 operates in a manner so as to limit to 6 years for a major defect, and in any other case 2 years, the right of the appellants to bring proceedings for breach of statutory warranties. 2. In order to answer this question, it is necessary to determine if the amendment made to the period in which to bring proceedings for breach of statutory warranty is procedural in nature or affects a substantial right. If the former, there is no presumption against retrospectivity: see Maxwell. If not procedural, it is necessary to determine if the legislature intended the amendment to operate retrospectively and, if so, in respect of which proceedings. 3. We regard the amendment of the 7 year time period in the present case as not procedural. It has the effect of altering a substantial right. 4. The difference was explained by Williams J in Maxwell. There, his Honour referred to the decision of Dixon J (as he then was) in Kraljevich v Lake View & Star Ltd [1945] HCA 29; (1945) 70 CLR 647 and said at 277: … Where the question arises whether a statute has a retrospective operation, it is usual to divide statutes into two classes, the one where the new statute affects existing substantive rights and the other where it affects only the existing practice and procedure of the courts for enforcing such rights. The distinction between the two kinds of statutes was explained by Dixon J. (as he then was) in Kraljevich v. Lake View & Star Ltd. [1945] HCA 29; (1945) 70 CLR 647. His Honour said: "The presumptive rule of construction is against reading a statute in such a way as to change accrued rights the title to which consists in transactions passed and closed or in facts or events that have already occurred. In other words, liabilities that are fixed, or rights that have been obtained, by the operation of the law upon facts or events for, or perhaps it should be said against, which the existing law provided are not to be disturbed by a general law governing future rights and liabilities unless the law so intends, appears with reasonable certainty. But, when the alteration in the law relates to the mode in which rights and liabilities are to be enforced or realized, there is no reason to presume that it was not intended to apply to rights and liabilities already existing and its application in reference to them will depend rather upon its particular character and the substantial effect that such an operation would produce" (1945) 70 CLR, at p 652. Statutes of limitation are often classed as procedural statutes. But it would be unwise to attribute a prima facie retrospective effect to all statutes of limitation. Two classes of case can be considered. An existing statute of limitation may be altered by enlarging or abridging the time within which proceedings may be instituted. If the time is enlarged whilst a person is still within time under the existing law to institute a cause of action the statute might well be classed as procedural. Similarly if the time is abridged whilst such person is still left with time within which to institute a cause of action, the abridgment might again be classed as procedural. But if the time is enlarged when a person is out of time to institute a cause of action so as to enable the action to be brought within the new time or is abridged so as to deprive him of time within which to institute it whilst he still has time to do so, very different considerations could arise. A cause of action which can be enforced is a very different thing to a cause of action the remedy for which is barred by lapse of time. Statutes which enable a person to enforce a cause of action which was then barred or provide a bar to an existing cause of action by abridging the time for its institution could hardly be described as merely procedural. They would affect substantive rights. … 1. Similarly, Fullager J in Maxwell also adopted the statement of Dixon J at 285. 2. Dixon CJ in Maxwell also restated the proposition at 267 where he said: The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events. But, given rights and liabilities fixed by reference to past facts, matters or events, the law appointing or regulating the manner in which they are to be enforced or their enjoyment is to be secured by judicial remedy is not within the application of such a presumption. Changes made in practice and procedure are applied to proceedings to enforce rights and liabilities, or for that matter to vindicate an immunity or privilege, notwithstanding that before the change in the law was made the accrual or establishment of the rights, liabilities, immunity or privilege was complete and rested on events or transactions that were otherwise past and closed. 1. This position was confirmed by the High Court in Victrawl Pty Ltd v Telstra Corporation Ltd (1995) 183 CLR 595; [1995] HCA 5. At 615, Deane, Dawson, Toohey and Gaudron JJ set out the test as follows: It is whether the provision's operation is merely procedural in the sense that it would not, if given unconfined operation, affect pre-existing substantive rights or liabilities. It is only if a statutory provision is merely procedural in that narrow sense that the ordinary presumption against retrospective operation is inapplicable. 1. In the present case, the statutory warranty as it existed prior to the 2011 Amending Act gave a successor in title a right to bring proceedings for any breach for a period of 7 years. This right was subject to whether the warranty had already been enforced by a predecessor in title: see s 18D(2). The right was defined by both subject matter and time. The shortening of the time period would thus affect a substantial right that had accrued to the appellants before the 2014 Amending Act commenced. 2. It follows that the substantial right could only be removed if the legislature expressed an intention that the amendment to s 18E by the 2014 Amending Act was to operate in respect to claims for breach of statutory warranty to which the 7 year period otherwise applied. 3. As we have already stated, the respondents relied on c1 121 and said there was a clear intention of the legislature that the amendment to s 18E operates retrospectively. Further, to the extent there was any inconsistency with cl 109 and Part 19 of Sch 4 of the HB Act, cl 120 provided that cl 121 prevails. 4. On a simple reading of these clauses, one may be attracted to the argument that the effect of cl 121 was to make retrospective the operation of the amendment to s 18E by the 2014 Amending Act to claims brought by successors in title in respect of building work carried out prior to the commencement of the 2011 Amending Act. 5. Such a construction is supported by the following: 1. the legislature specified in Part 20 that certain amendments to the HB Act, including to Part 2C, were not to operate retrospectively. These included the changes to ss 18BA and 18F found in Part 2C of the HB Act, and ss 7, 7A, 48E and 95: see cls 125, 123, 129 and 131 respectively; and 2. there is no such limitation in Part 20 which would exclude from the operation of cl 121 the amendments made to ss 18B (a), 18B(2) and 18E by the 2014 Amending Act. 1. Although the argument may hold some attraction, we believe it to be incorrect and reject it for the following reasons. 2. First, such analysis does not focus upon the substance of the amendment being made by the 2014 Amending Act, nor does it have proper regard to the position which operated following commencement of the 2011 Amending Act until the 2014 Amending Act was commenced. 3. Following the commencement of the 2011 Amending Act, there were in fact two forms of s 18E which operated in respect of claims for breach of statutory warranties. The first provided for a limitation period of 7 years in respect of all claims brought for breach of the statutory warranties involving works carried out under a contract entered into prior to the commencement of the 2011 Amending Act. The second form of s 18E provided for a limitation period of 6 years in respect of structural defects, as defined in the amended section, and 2 years in any other case. 4. For the reasons outlined above, the 2011 Amending Act preserved the right to commence proceedings within 7 years from the defined date for breach of statutory warranty for any defect in respect of claims brought by a successor in title against an owner builder. 5. The 2014 Amending Act did not expressly remove this right. It did not repeal cl 109. 6. Rather, the language of cls [28] and [29] of Sch 1 of the 2014 Amending Act was to "omit 'structural defect (as defined in the regulations)' from section 18E(1)(b)" and "insert instead 'major defect in residential building work'." In addition, subs 18E(3) and (4) were added to provide for a definition of major defect. 7. As Bathurst CJ said in R v Seller, it is necessary to consider "both the Act which is amended and the amending Act" as a combined statement of the will of the legislature. Such an approach supports the view that regard must be had to the fact that there was, following the 2011 Amending Act two forms of s 18E. One contained a differential limitation period of 6 and 2 years by reference to the expression "structural defect". In respect of this version of s18E, it was amended by the omission of the word "structural defect" and the insertion of the expression "major defect in residential building work" together with a definition of that work. No amendment was expressly made to the version of s 18E which applied prior to the 2011 Amending Act and which continued to apply by reason of cl 109. 8. Secondly, a review of the second reading speeches does not suggest that the intention of the legislature was to repeal or affect the rights which applied to building work carried out prior to the 2011 Amending Act. 9. In the first reading speech for the 2011 Amending Act, the then Minister for Fair Trading said: Requiring builders to warrant non-structural work for 7 years is overly burdensome and impractical. Non-structural elements including painting work, kitchen cabinets and internal doors. Manufactured items like cabinets and doors may only have 812-month manufacturer's warranty on them. It is sensible and fair to require builders to provide warranties of this type of work for two years as is currently required under the home warranty insurance scheme. Fair Trading complaints data supports these time periods. This data, collected by the Home Building Service since 2007, shows that over 82 per cent of complaints about structural defects are made within 6 years and that over 80 per cent of non-structural defect complaints are made within the first two years. 1. In the second reading speech for the 2011 Amending Act, when explaining the introduction of the changes to the limitation period by reference to "structural defect", the then Minister for Finance and Services said: The bill does not propose any change to the current definition of "structural defect". I understand that some industry groups have strong views that the current definition is too wide and requires urgent revision. Fair Trading will examine this issue in further detail, particularly in the context of a broader review of the home building legislation. 1. As the first reading speech for the 2014 Amending Act made clear, this review took place. In the first reading speech the then Minister for Fair Trading said: Currently, the statutory warranties cover work for six years from completion for structural defects, and two years for any other breaches of warranties. Consequently, for claims brought after the two-year period the question of whether a defect is a structural defect is critical. Stakeholders on all sides have expressed concerns over the definition of "structural defect". In fact, 90 per cent of stakeholders who responded to the 2012 issues paper wanted the term better defined. The main issue was that a significant defect may not be a structural defect but could still be a major defect worthy of a six-year warranty period. Of particular concern was whether water penetration and fire safety non-compliance fell within the two or six year warranty period, as there has been considerable variation in rulings on these matters depending on the severity of the defect. Reform of the definition of structural defect is long overdue. It is necessary to reduce the significant time and money spent by parties on disputes and to ensure more consistent court and tribunal decisions. This will deliver cost savings for homeowners, builders and the Home Warranty Insurance Fund. The bill replaces "structural defect" with a new concept of a "major defect" for six years statutory warranty period. To provide for certainty the definition will be moved from the regulation to the Act. … 1. Similarly, in the second reading speech, the then (different) Minister for Fair Trading made comments to similar effect, namely that it was necessary to change the definition of "structural defect" to "major defect" to ensure both defects "worthy of a six-year warranty period" were not excluded because they fell outside the definition of "structural defect" and to ensure a more consistent approach in decision-making in the courts and tribunals. 2. When these speeches are considered together, it is clear that the legislature was seeking to modify the position which had been adopted by the 2011 Amending Act and that following a review and consultation with stakeholders the legislature intended to alter the definition of those matters which fell within the six-year warranty period so as to include defects that were "major" defects, whether or not they were structural defects.. However, there is no suggestion in the reading speeches that there was an intention of the legislature to alter the 7 year limitation period applied prior to the 2011 Amending Act. 3. Consequently, we do not accept the respondents' submissions on this aspect. 4. Thirdly, we find that cl 121 was intended to make retrospective the amendments made by the 2014 Amending Act to s 18E, but only in respect to work carried out or contracts to which s 18E, as introduced by the 2011 Amending Act, might apply. Otherwise, the amendment to s 18E in the 2014 Amending Act only applied prospectively to work commenced or contracts entered into after the 2014 Amending Act commenced. 5. Having regard to the principles that we have set out above, an interpretation should be given to the legislation which does not remove an existing right unless a clear intention is expressed by the legislature to do so. 6. The amendments which have been made, according to the reading speeches to which we have referred, have the intention of changing the rights of a person entitled to make a claim for breach of statutory warranty. That is, those claimants who are subject to a warranty period of 6 or 2 years, based on whether or not a defect is "structural", will be entitled to the same warranty periods. However, the definition of the kind of defects to which the 6 year period will apply has been changed to "major". Otherwise, the limitation period has not generally been altered. 7. The construction proposed by the respondent would reduce the 7 year period to a period of 6 years and 2 years. That is, the rights of a claimant such as the appellants who, until the 2014 Amending Act commenced, had an accrued right to bring proceedings within 7 years, would be reduced. The right was accrued because, by the time of the 2014 Amending Act, the appellants were the successors in title and therefore had a vested right to enforce the statutory warranties in relation to defective work previously done by the respondent owner builder. For the reasons stated by Dixon CJ in Maxwell (above), and having regard to s 30(1) of the Interpretation Act, which provides that a "legal proceeding or remedy may be instituted, continued or enforced, as if the Act … had not been amended or repealed", in our opinion there is no relevant statutory intention expressed in the 2014 Amending Act to repeal or otherwise remove from the appellants their right to commence proceedings. 8. This view is supported by s 30(2)(d) of the Interpretation Act which provides that the "operation of any savings or transitional provisions contained in the Act" are not affected. In this regard cl 109 was not repealed. Certainly, there was no express provision affecting its operation. 9. Fourthly, the interpretation proposed by the respondents would lead to the conclusion that some provisions had become redundant or that the legislature did not turn its mind to the repeal of those provisions which were no longer to operate. This approach is inconsistent with what the High Court said in Project Blue Sky, namely that an interpretation of the legislation should be given which "is consistent with the language and purpose of all provisions (emphasis added) of the statute". 10. Fifthly, the interpretation proposed by the respondents is contrary to the principle set out by the High Court in Maybury. That is, having specifically preserved in cl 109, when passing the 2011 Amending Act, the right to bring proceedings within 7 years for breach of the statutory warranties in s 18B of the HB Act, the legislature is "not to be considered by a general enactment passed subsequently", in this case cl 121, "to have intended to derogate from that which, by their own special Act, they had thus carefully supervised and regulated". 11. Rather, all that was intended by cl 121, in its application to the amendments made to s 18E, was to make those amendments affected by cls [28] and [29] of Sch 1 of the 2014 Amending Act applicable only to s 18E, as amended by the 2011 Amending Act. 12. Seen in this way, there is no relevant inconsistency between cls 121 and 109 and therefore cl 120 does not operate. 13. A different construction would lead to the view that the legislature introduced a general transitional provision which it intended would operate to repeal cl 109 by creating an inconsistency with cl 121 which was to be resolved by recourse to cl 120. This seems improbable. Rather, the inference to be drawn is that the legislature did not intend to affect the operation of cl 109 or to affect the limitation period in respect of the claims for breach of statutory warranties for contracts to which that clause applied. Is the position affected by reason of the fact that the rain event, the cause of damage to the property, occurred in about August 2015, after the 2014 Amending Act had commenced? 1. We find the fact that the rain event occurred in August 2015 to be irrelevant to a resolution of this appeal. As is made clear by the cases to which we have referred above, the limitation period for bringing proceedings for breach of statutory warranty commences on the date specified in the legislation and expires, in the present case, 7 years thereafter. 2. The claim arises under a contract or notional contract, the cause of action accruing on the date the breach occurs. 3. Consequently, the bringing of proceedings, and whether or not they are commenced in the period allowed by the HB Act, is independent of the date on which loss or damages was suffered. 4. It follows that, in our view, the Tribunal was in error and should have concluded that the limitation period applicable to the appellants' claims was 7 years. Orders 1. In light of the conclusions we have reached, orders should be made setting aside the original decision. The parties agreed that if this were to occur it would be necessary for the proceedings to be remitted as various liability and damages questions had not been resolved in the original proceedings. We will make these orders. 2. As the claim is for an amount greater than $30,000, r 38 of the Civil and Administrative Tribunal Rules, 2014 (NSW) applies to costs of this appeal in consequence of r 38A. 3. The appellants have been successful. Accordingly, an order should be made that the second respondent pay the costs of the appeal, the first respondent taking no active position and there being no dispute in this appeal in relation to the orders made concerning the claims against the first respondent in the proceedings at first instance. 4. Provision will also be made for a party to apply for a different costs order if appropriate. 5. The Appeal Panel makes the following orders: 1. The appeal is allowed and the orders made by the Tribunal on 1 November 2017 are set aside. 2. The proceedings are remitted for rehearing by the Tribunal to be determined in accordance with these reasons and according to law. 3. Subject to order (4), the second respondent is to pay the costs of the appellants in this appeal, such costs to be as agreed or assessed under the relevant cost legislation. 4. If any party contends for a different costs order, such application (including submissions and evidence) must be filed and served within 7 days from the date of these orders. Thereafter, the respondent to the costs application is to file and serve submissions and evidence in reply. The applicant for cost may file and serve submissions in response 7 days thereafter. Submissions must include submissions about whether an order should be made dispensing with a hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act, 2013 (NSW). 5. In the event an application is made under order (4), order (3) shall cease to have effect. ********** ​ I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 May 2018